Usually when a prototypical steak-head like me writes something like that it's in the service of their own macho self-puffery. "You gotta be hard in this world, baby", they'll say after doing something utterly non-heroic like firing the kid who mows the lawn. The implication is that the speaker is cold-blooded under fire... a honed steel blade of readiness in any circumstance and a macho, macho man in general.

This isn't that type of column.

Terrorism is horrifying. If you are unable to summon any sympathy for the people of London today you are likely either a sociopath or weren't a grown-up on September 11, 2001.

The point here is simply that the practical matter of digesting the emotions and event to determine "how does this impact my portfolio?" takes precedence over sympathy. Markets were in the process of reacting, sharply, negatively, when most of us arrived today. Your entire portfolio had already moved when you showed up, prices had appreciably changed for the first time in ages.

The markets reaction is happening, with or without you. Assessing the situation and how it affects you (if at all) is imperative.

The human spirit is such that we must in fact continue to press forward. It's not selfish to deal with the sobering unpleasantries of the world we live in and to take actions to secure our individual financial stability; especially in the midst of tremendous geopolitical and economic instability. This view in no way is intended to trivialize the terrible loss. However, it is not greed but merely survival for just people to remain focused and persistent as terrorists attempt their unspeakable acts.

The goal of terror is fear and disruption. To focus on the task at hand is tantamount to self-defense.

In the interest of "provoking thought and generating debate", I'll run through some of the Big Picture Questions off the top of my head. I invite input from any or all of my fellow Prof's, as well as Minyans.

Does a single terror-strike in London "matter" (strictly in a market sense)?

Might as well start with the elephant in the room; the big question that is too impolite for nice people to say aloud. Beyond the horrific loss of life, is this the exogenous event that catalyzes a market spiral?

As a one-time event, no.

That's what the tape is saying today by opening on the lows and gaining strength all session. "Abercrombie's (ANF) numbers were great... unless this attack marks a new trend I want to be long on this weak open."

Obviously, everything hinges on the "one-time event" qualifier. Curiously, 15 minutes away from the close as I type I have yet to hear the phrase "overnight event risk" uttered once. That, in itself is concerning, particularly with the potential ratcheting up on the short-vol trade Prof. Succo has been discussing today.

The opening levels this morning, short-lived though they were, washed out the last of the weak-hands on the long side.As I mentioned on the buzz, those who went into today feeling a nagging desire to sell some long positions had more than enough reason to blowout this morning.

The strike in London was a one time event. We've been reminded of the chronic nature of the terror war. Ok... consumers and industry have gotten used to that condition. As a kicker, the strike gives companies with exposure an excuse for bad quarters. (cynical though that is).

Money heads all over the world are more apt to lower rates / stop hiking rates in a world more concerned about terror.

Focus on terror is much better than focusing on China.

"We were weak, we tested, we didn't break... ours is not to question the charts, ours is to obey them."

Boo is ready to throw in the towel. Terror strikes in London and the market didn't break. At some point the bears have to wonder if anything, ever, is going to matter to the bulls.

Again, none of this is intended as glib. People are buying... to the extent that they have a thesis, it's likely touched on above and I'm open to others.

How has the risk potential increased, despite the price action today?

Prof. Succo has been covering this side of the story all day, in real time. (And doing a better job of it than I, or anyone else I know of, anywhere, could, to be candid.)

If you short vol for a living (and people seem to be doing so more and more), the spike this morning was a clear blessing. You saw vol up, you shorted options like mad to "capture the move".

If you did it at the open and got out by the close, it was a great trade.

If there is another strike of note before we open tomorrow and you're still short all that vol in the morning you will likely be wiped out entirely.

The Street has been very quick to digest and dismiss today's strike and its implications. As long as terror continues to matter to the tape only fleetingly, the compression in vol increases; increasing the magnitude of a breakdown, if / and when anything which unquestionably matters should happen.

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